Class 1 PPT: Venture Business Overview - Industries, Business

NBC1 2008, (c) 2008 Jay A. Smith

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New Business Creation I From idea to investment

Jay Andrew Smith ([email protected])Associate ProfessorInamori Academy, Kagoshima UniversitySpring/Summer 2008

ビジネス創造論Ⅰ


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Class 1: Introduction to Venture Business, Industry Analysis & Strategy


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Ｂｕｓｈ

Jay Andrew Smith (44) 1963 New Jersey, USA 1985 Rutgers University (Economics 経済学 , Physics 物理学 ) 1989 Harvard Business School (MBA 1989) 日本に始め来ました 1990 Management Consultant (NY, NJ, Tokyo) 1992 Venture Business (IT, Internet, email) 1998 Investment Banker 　 (SF, LA, SV, NY, LV)

Raised $400,000,000 for clients - IPO, Private Investment, M&A 2004 Kagoshima University, Inamori Academy Professor from 2005 日本に初めて来たのは 1989 年 4 月 2008 年？

日経平均株価　３９，０００単位円 Dow Jones Indus. ２，７５０点＿＿＿　総理大臣＿＿＿大統領ＯＳ＝　　　

１２，９００円１２ , ３００点

and 宇野 and 海部竹下Ｂｕｓｈ

DOSV


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Student Introduction

From Kagoshima ？ ___% Other ____% Course of Study

Electrical Mechanical Chemical Medical Bio Nano Fisheries Other

Lived or studied abroad? Speak English Well? First Business Course? Has “Good” Business Idea?


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Venture Business English 　 (1)assets 資産 sales channel 販売ルート

liabilities 責任 product プロダクト／製品

sales 販売 market 市場

marketing マーケティング application 適用／応用

market segmentation 市場細分化 capital 資本／資産

finance 財政／財務 idea 考え

accounting 会計 control 統制

entrepreneur 起業家 administrator 管理者

stock 株 industry 産業

investor 投資家 competitor 競争相手

business model ビジネスモデル sustainable 支持できる

strategy 戦略 competitive advantage 競争優位

financial analysis 財務分析 substitute product 代替製品

pro-forma 形式上 taxes 税

cash flow キャッシュフロー economics 経済学

innovation 革新／変革 anticipation 予想

customer 顧客 adaptation 適応

distributor ディストリビューター momentum 運動量

supplier 製造者／提供者 synthesize 総合する


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Revised Class Schedule

　　　 Office Hour: Ｔｕｅｓ： 13:30-15:00 VBL 2F 電話 285-

3630

4/15(火 )16:10-17:40 Intro to Venture Business & Industry Analysis①4/22(火 )16:10-17:40 Intel Case Study②5/13(火 )16:10-17:40 ③ Sales & Marketing5/27(火 )16:10-17:40 Sales & Marketing Case Study④6/3 (火 )16:10-17:40 Marketing Project Presentations⑤6/10(火 )16:10-17:40 Ideas and Innovation⑥6/17(火 )16:10-19:20 Product & Service Presentations / Finance & Accounting ⑦⑧6/24(火 )16:10-17:40 Finance & Accounting (continued)⑨7/1 (火 )16:10-17:40 Business Models & Plans⑩7/8 (火 )16:10-19:20 Elevator Pitches / Investment & Valuation ⑪⑫7/15(火 )16:10-17:40 Presentation Workshop ⑬ & Review7/22(火 )16:10-19:20 Presentations 2 Classes⑭⑮

Final Report: Team Business Plan Paper By July 29 ( 火）　

[email protected]


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Making a Successful Venture Business

Idea Entrepreneur TeamCustomerMarkets

StrategicPartners,EarlyUsers,Supporters

Capital Yen/ $

BusinessModel &Strategy

Sales & Marketing

R&D, Production,Operations

Suppliers, Distributors


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All Parts Work Together

Business &TechnologyEnvironments

Opportunity Social &GovernmentEnvironments

BusinessStrategy

MarketingStrategy

OperationsStrategy• Organization• Human Resource• Production• R&D

FinanceStrategy • Leverage• Asset Utilization• Make/buy• Lease/own

Do strategies support, fit each other, have flexibility, balance/manage risk?


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Famous Venture Business Successes

Bloomberg


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Silicon Valley Seminar

10 Students September 5-6 days IT, Biotech VC, Lawyers Stanford Berkeley


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Japan & Silicon Valley, California


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Japan & Silicon Valley, California

Japan140,000,000 日本人377,835 sq km 磐梯山　 N37 。 38’

California40,000,000 外国人411,015 sq kmSF 空港 N37 。 37’

SF SJ

LASiliconValley太

平洋

Hawaii ・・

SF=San Francisco ( サンフランシスコ )SJ=San Jose ( サン・ホセ )


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Silicon Valley

1849 California Gold Rush San Francisco 　 800 人 =>24,000

人 1970~ Silicon Rush

Silicon Chip Fairchild Semiconductor, Intel

Mix 4-5 million 人 5 Counties (SF,SM,SC,CC,A) 外国人： 1st/2nd/3rd 世代 Amer

ica, Europe, India, China, MidEast, Russia, Japan

Stanford, UC Berkeley, UCSF, Santa Clara , 他大学

Lawrence Livermore Government Research Labs

Oakland

Berkeley

Kagoshima Univ. Silicon Valley Office


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Birthplace of Silicon Valley

David Bill Packard & Hewlett367 Addison Ave, Palo Altoin David Packard’s Garage

1938: R&D begins on 1st productaudio oscillator

1939: Formal partnership Jan 1. Decide name with a coin toss. Sales: $5369. Employees: 2

1938


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Not So FamousVenture Business Successes (M&A) TriVida

“Third life” together for management team Personalization software Sold to BeFree.com 1999 BeFree IPO 1999

SpinPop - Electric Lollipop John Osher “Serial Entrepreneur” Motorized lollipop Low-cost motor usable in mouth High-priced electric toothbrush already Low-priced spin toothbrush SpinBrush Company

Sold to P&G for $475 million

(475 億円 )


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Most Venture Ideas Don’t Succeed

Idea

BusinessStart-up

Sales /Funding

Profitable

IPO

Sales – Costs > 0

Bubble


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Idea Entrepreneur TeamCustomerMarkets


Capital Yen/ $


Sales & Marketing



Valuable


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Successful Venture Business Create Value by Solving Problems

Sony Big radios not portable FedEx This has to get there overnight Google I can’t find good information eBay I have old stuff you will pay for Microsoft Not everyone is a programmer Intel These computers are too big Bloomberg I need best, timely info to invest

Company Problem/Opportunity/Desire

(financial companies can be great early customers)


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Problems Become Opportunities

“What people need is problems. The power that emerges when faced with a problem, where you would lose everything,

is your true power.”

Souichiro Honda

人間に必要なのは困ることだ。絶体絶命に追い込まれたとき

に出る力が本当の力です。

本田宗一郎


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Today’s Global Issues Pollution Hunger Oil Shortage Population Growth Military Spending Population Aging Religious Fundamentalism China Rising (supplier, consumer, politics, military)

Other __________


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Japan Issues Economic Recession Government Bureaucracy Small land area/population Employment dislocations Oil Shortage Population Aging China Rising (supplier, consumer, politics, military)

Humidity Other __________


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Idea Entrepreneur Team

CustomerMarkets


Capital Yen/ $


Sales & Marketing




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Drucker on Entrepreneurs

The entrepreneur alwayssearches for change,responds to it andexploits it as an opportunity.

- Peter Drucker

起業家は常に変化を捜し、それを機会として利用し、対処する。


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Peter Drucker – Business Guru Pioneer of management thinking Over 30 books on management Drucker Institute The Peter F. Drucker Masatoshi

Ito Graduate School of Management (Claremont Univ.)

Leader to Leader Institute

(1909-2005)


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Apple’s Computers Then & Now

iPod 6G160,000,000KB HD

First Apple Computer

8KB RAM in 16 Chips


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Microsoft Should Not Exist

IBM dominated PC market IBM thought hardware

was most important IBM now has no PC h

ardware at all

Microsoft didn’t create its own first software

Bill Gates (~1985)仮定とは危険なものである。

アガサ・クリスティ


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“The Stone Age didn’t end because they ran out of stones.”

Stone Age

BronzeAge

Mechanical Age

SolarPower• wind/water• plants/ fire

AnimalPower• 動物• 人間

Coal/OilPower

NuclearPower

PlasticsAge

Bio GeneAge Age

NanoAge?

--------------Analog Age--------------------------------------- Digital Age

Renewable-Sun-Wind/tide-Plants

1800 1900 2000 年-4000 年 -2000 0

Wired -> Wireless

ElectricalAge

Electronic QuantumAge Age?

control

organic

material

energy/infotransfer

energy

network

石器時代はそれらが石を使い果たしたので終わらなかった

The speed of change is accelerating.


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Entrepreneurs are Innovators

Kazuo Kashio

（ theme: apply electronics, digital)


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Entrepreneurs Create New Models“You never change things by fighting the existing reality. To change something, build a new model that makes existing models obsolete.”

既存の現実の問題によって決して事を変えてはいけない。問題を変えるために、既存のモデルを時代遅れにする新モデルを造りなさい。


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Company Success Factors

Company Success = f (company, industry)


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Industry Analysis

In which industry does the company participate? How big is the industry? How much is the industry growing? How is the industry changing?

New laws (e.g., pollution) New technology

Industry profitability? Structurally attractive industry?


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What industries? Toyota

Suntory

Disney

ANA

Sony

Yahoo

Auto, Motor Vehicle, Transportation Equipment

Beer, Liquor, Soft Drink, Beverage

Movie, Theme Park, TV, Entertainment

Airline, Hotel, Travel, Leisure

Consumer Electronics, Music, Movie, Entertainment

Internet Provider, Ecommerce, News, Media, Advertising

Product/Service Areas

Application orBroader Category


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How Big isThe Industry?

www.stat.go.jp

日本 (2004): 　　　　　　〔円） Government 82,110,900,000,000Defense （陸軍） 4,876,400,000,000- Personnel 2,165,400,000,000 -Equipment 880,600,000,000

National Defense Agency,Ministry of Finance

一年間　　 47,993,000,000,000 円 48 兆円輸送 ( 自動車 , 船 … )


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Consumer Electronics (2003)

0

10

20

30

40

50

60

70

1980 1990 2000 2003

Mill

ion

Units

DVD PlayerVideo PlayerLCD TVColor TVMicrowaveWashing MachinesRefrigerators

(Japan Production, 2003 METI)


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Consumer Electronics (2003)

0%10%20%30%40%50%60%70%80%90%

100%

1980 1990 2000 2003

DVD PlayerVideo PlayerLCD TVColor TVMicrowaveWashing MachinesRefrigerators

(Japan Production, 2003 METI)

DVD vs Video


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Japan PC Market 2003

NEC 21%

Fujitsu 21%

Dell 10%

Sony 9%

Toshiba 8%IBM 7% Hitachi 5%

HP 4%

Others 15%

Total = 10 million units


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Industry Life-Cycle

Emerging Growing Maturing Declining

SALES

TIME


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Industry Life-Cycle StagesEmerging Growing Maturing Declining

ExampleIP 電話　

Digital

CameraAuto

Analog

Camera

Growth Rate

Starting(2 mil ->22 mil)

2002 2007

Increasing Slowing Decreasing

Product/

Technology

Rapid

ChangesProcess Changes

Incremental

ChangesLittle Investment

Customers1st Timers

Patterns

Building

Smart, Price Focus

Decreasing

CompetitionNew Positions

Positions

BuildingIncreasing

Some exiting

E G M D


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Venture Companies Often Start in or Create Emerging Industries New products/services Unproven market Little market info First-time buyers Know-how developing Technology changing “Rules” not set Structure unsettled Future uncertain


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Growth, Market Share & Competition Market share=company’s % of industry sales Growing industry is often less competitive

If the industry doesn’t grow companies must take customers from other companies to grow.

2004 2005

Co. A

Co. B

Co. A

Co. B

2006

Co. A

Co. B

Sales

Co. BCo. B

50%

50%

50%

50%

70%

30%


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Industry Structure

COMPANYSuppliers製造者

Competitors競争相手

Substitutes代替製品

Channel販売ルート

Customers

顧客

4 Cs

VentureBusinesses

Often enter here Collaborators

協力者 / 協業者 “5th C”


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Example: 　ヤマト急便

ヤマト急便Suppliers

Competitors

Substitutes

Channel Customers


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Example: 　ヤマト急便

ヤマト急便Vehicles,Fuel, IT

UPS佐川、 UPS,郵政省

Fax, Car

7-11,FamilyMart, 0120

Homes,Offices

Others???


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Company

Who are we? Why are we here? What are our goals? What are our strengths? What are our weaknesses? What are our key competitive advantages? What is our market position? What is our strategy? What is our business model?


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Suppliers

How many? How big? Relative Strength Importance/Value (e.g., keitai strap vs. LCD screen)

Derived Demand

Intel Processor,MS Windows,

Sharp LCD

PC UserKyoceraIC Chip

Package


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Channel

How your product service gets to customer Direct – company’s own network

Sales Force, Mail, Telemarketing, Vending, Some Internet/Catalog, Company Store

Indirect – via one or more other companiesSales Agents, VAR (value added resellers),

Stores (department, convenience, supermarkets, Some Internet/Catalog (e.g. Askul)


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Collaborators

Partners, helpers, advisors, experts Directly or indirectly help the company Examples

Industry experts, user groups, educators, advisors Industry or trade groups Government, NPOs, universities Complementary product/service providers

Software makers for hardware Computer magazines, manuals, websites


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Competitors

Who are they? How many? What are their goals & strategies? What are their (relative) strengths? What are their (relative) weaknesses? More competitors leads to lower prices

(except maybe in Japan)


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Substitutes

How else can customer achieve goal? What are the advantages/disadvantages?

Time, CostQuality, Effectiveness

What does it cost customer to switch? Are there new technologies coming?

Foot Horse Train Car Plane


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In Class Exercise

___ CompanySuppliers

Competitors

Substitutes

Channel Customers


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5 Industry Forces Affect Profitability

CompanySupplier

Power

New Competitor

Entry

Substitutes

Buyer PowerChannel / Customer

CurrentCompetitor

Rivalry

Profit = Price – Costs

cost

price

price

price


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5 Industry Forces (Michael Porter, HBS) Buyer Power (Customer /Channel)

How many, how big, how valuable, how sensitive Supplier Power

How many, how big, how important to us, us to them Current Competitor Rivalry

How many, cost structure, capacity, positioning, exit costs New Competitor Entry

Ease of entry, cost of switching, technology change Substitute Products/Services

Advantages/disadvantages, cost of switching


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Keiretsu Effect on Structure

Mitsubishi GroupCompany

Suppliers

Competitors

Substitutes

Channel Customers+

KyoceraExample日本電気、三菱電気、 etc.XIntel, Fairchild OK, also 松下

Group company, suppliers & sometimes channel work together, keeping out competitors,


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Homework (next class 4 月 22日）Intel Case Study

Just read it…we will discuss in class … think about the company, industry structure, and the decisions made.

Japanese and/or English versions


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Suggested Readings www.venturesmith.us

www siliconvalley.com startupjournal.com inc.com wired.com bfi.org economist.com youtube.com skype.com answers.com worldlingo.com nikkei.co.jp dreamgate.gr.jp

Books 肩をすくめるアトラス by アイン・ランド宇宙船地球号操縦マニュアルちくま学芸文庫 by バックミンスター

フラー会議が変わる 6 つの帽子 by エドワード・デボーノヴァージン―僕は世界を変えていく by リチャードブランソン日本を創った 12 人 by 堺屋太一


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Class 2

Industry, Strategy, Business Model (continued)

Intel Case Study


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Announcements


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4 C’s & 2 S’s Review


Competitors

Substitutes

Channel Customers

Collaborators協力者 / 協業者 “5th C”


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4 Cs + 2s – The Players Company (us)

Mission, Goals, People, Structure, Strategy, Model

Customer (goal) Who? How many, How strong, How important, Wants & Needs

Channel (path) Sales Team, Distributors, Service, Support, Partners

Competition (them) Who, Current, Future, Advantages, Position

Substitutes (other choices for customer) What, Advantages, Costs, New Technologies

Suppliers (inputs) Who, How many, How strong, How important to us,


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5 Forces Affect Industry Profitability

CompanySupplier

Power

New Competitor

Entry

Substitutes

Buyer PowerChannel / Customer

CurrentCompetitor

Rivalry

Profit = Price – Cost

cost

price

price

price


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5 Forces Buyer Power (Customer /Channel)

How many, how big, how valuable, how sensitive Supplier Power

How many, how big, how important to us, to them Current Competitor Rivalry

How many, cost structure, capacity, positioning, exit costs New Competitor Entry

Ease of entry, cost of switching, Substitute Products/Services

Advantages/disadvantages, cost of switching


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Today’s Drucker

A business has 2 basic functions:

marketing

and

innovation.Peter Drucker


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Intel Case Study Big idea, new technology/business area:

semiconductors, IC chips Company is more than its products

“Platform” (product series, same technology base) Technology Innovation Marketing Innovation Strategic Choices Sustainable Competitive Advantage


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Intel 1968-1977 Case

“Trying to do things nobody else could” – Robert Noyce (co-inventor integrated circuit IC)

Gordon Moore (creator of “Moore’s Law) Andy Grove joined, took personal “risk” First 2 DRAM products not successes 3rd product 1103 became world leader,

90% of Intel revenues (concentrated)


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Intel

IntelSuppliers

Competitors

Substitutes

Channel CustomersKyocera, etc

Motorola

AMD, TI, Cyrix

RISC

日本の DRAM

END

USER

Licensees-IBM-Others

DirectIBM

CompaqDell

Packard Bell

CHANNEL

SoftwareProviders• OS• Application

Equipment (sole/dual)

collaborators


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Intel DRAM Strategy Strategy: push product design, be first to market

Design & process technology leader Investment in plant & equipment Costs drop over production volume (scale) growth Prices drop with competitive capacity DRAM generally not protectable with patents Japanese started introducing products more rapidly

Invested more heavily in production (44% vs. 22%) 1986 Intel decided to exit DRAM business

1/3 of R&D, but only 5% of Revs, was small player in market Japanese beat Intel on process technology (of commodity)


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Intel and Microprocessor 1970 CPU chipset order for Busicom calculator

Technology development “paid by customer” Bought rights for “non-calculator” use

Hard to see future even for Gordon Moore “…never gave it another thought” – Moore “We didn’t take it (PCs) seriously” – Grove

Non-sequential forecasting Sometimes easier for outsider to see

Exit: By 1984 mid-level managers shifting technology Hard to leave business that began company Especially for long time senior managers Mid-level managers closer to daily business realities


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Apple/Motorola vs. IBM/Intel

First to Market Closed architecture Sole-provider

Exclusivity Proprietary

Big, famous name Standardized, open

architecture Components Software Scale economies

Intel gets benefit of IBM marketing and strategy (derived demand)

INTERDEPENDENCE OF COMPANIES (p.30, 22)

“Value Chain”

1994 Apple/IBM-Motorola PowerPC chip2006 Apple/Intel


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Intel Microprocessor ProgressionChip(bits)

Transistors

Year Introduced

Initial

Price

Licensees Intel-Chip Market Share

8086(8-bit)

29,000

1978 $360 12 30%

80286(16-bit)

134,000

1982 $360 4 75%

80386(32-bit)

275,000

1985 $299 1 (IBM) 100%-IBM

80486(64-bit)

1,200,000

1989 $950 ? ?


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386 Changes Everything (1985)

Intel 386 Investments$200 million for design$800 million for production facilitiesDecides not to license, except IBM

IBM choice allows Compaq entry and Win IBM delays selling, to create more closed

architectureCompaq enters Desktop market with Intel 386


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486 and Wintel Collaboration

Hardware advance precedes software advance Microsoft Operating System (new DOS) not ready for 386 Need large installed base of hardware for software upgra

de Emerging collaboration between MS & Intel

WINdows + INTEL = “WINTEL” platform Software + Brain

Software investments (past and future) Increasing switching costs


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“Intel Inside” – Marketing Innovation

Ingredient （材料） /Component （成分） Marketing 　 Another example?

Intel is “superior to other chips” Market maturity, education higher (2nd, 3rd PC) Buyer Intel preference moved from 60% to 80% AMD: “it shouldn’t matter which chip” but it DOES

IBM, Compaq resisted, but then gave in Couldn’t fight Intel Better to have branded “Intel Inside” “premium” chip 6% rebate for use in partner marketing

Fight competitors with technology, marketing, lawyers and money power (all pointed to same goal) 1997 spent $750 million More valuable than patent


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Ending Question

Is the internet good or bad

for Intel?


74

Some Important Strategic Ideas Where is the most “value” in a computer? Success attracts competition, company must protect

against 2005 Intel has 82% of PC processor market

Technology moved so rapidly that patents became obsolete protect by know-how, branding, scale, luck

Small stuff that goes inside other stuff Allows focus, expertise, scale, “piggy-backing”

Thrived on derived demand driven growth and rapid change


75

Typical Market Positions & Strategies

Position Goal Strategy

LeaderMost

Sales

-Grow Market

-Grow Share

ChallengerChallenge Leader

-Target Leader

-Target Small

FollowerGrow Carefully

-Maintain Base

-Grow Quietly

NicheFind Safe Space

Specialize

Toyota

Nissan

Mazda

Daihatsu


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Fragmented Industries (fragment= 破片） Market divided over many

companies No dominant leader Largest competitor may only

have a few percent market share Examples:

Restaurants Book stores Repair shops Publishing Pet shops Hair Salons Hotels

第一ラーメン

第二ラーメン

第三ラーメン

第四ラーメン

第五ラーメン

第六ラーメン

第七ラーメン

第八ラーメン

第九ラーメン

第十ラーメン

第十ーラーメン第十にラーメンSlice 13

Slice 14

Slice 15

Slice 16

Slice 17

Slice 18

Slice 19

Slice 20

Slice 3999

ラーメン


77

Fragmented Industry Strategies

Construct formula facility Expand geographically Increase vertical integration Become low-cost producer Specialize by product/service Specialize by customer type Build brand


78

Company

Who are we? Why are we here? What are our goals? What are our strengths? What are our weaknesses? What are our key competitive advantages? What is our market position? What is our strategy? What is our business model?


79

Homework Assignment

Design your own personal “life” meishi

わしのめいし

1. Your Name (as you want it)- Nickname (optional)

2. Title (life position)3. Purpose statement4. Ideal living place(s)5. Identifying email address6. Anything else important

- Logo- Website- Business Name- Cool Phone Number

OO 枚 copies pleaseEmail: [email protected]

(any languages that fit)


80

Homework Assignment

Design your own personal“life meishi”

Jay Andrew SmithInternational Educator

Promoting GrowthAnd UnderstandingAround the World

New York + San Francisco + Kagoshima + [email protected]

SAMPLE

name

“title”

Purpose/goal

Cool place(s)

Meaningful email/HP address

logo

www.vistaprint.jp, ppt, Paint, illustrator, etc. by hand all OK


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Sample Meishi

Kenta Maruyama

Go to Space and Look the Earth

Kagoshima+Fukuoka+Space?

Someday Astronaut

[email protected]


82

Class 3

Sales &

Marketing


83

Today’s Drucker

The purpose

of a business

is to create and

keep a customer.


84

Marketing Universe

Product/Service (what) Market (where, who)

Location (U.S.,Japan, 鹿児島市 ) Gender (male, female) Age (<21, 21-35, >70, 子供… ) Activity (ski, golf, travel) Preference ( 和風、洋風、辛口）

Application (how, why) New application for a keitai New application for a tree

Ｐｒｏｄｕｃｔｓ

ＡｐｐｌｉｃａｔｉｏｎｓＭａｒｋｅｔ

ｓ


85

Filling Unmet Needs & Wants

Market Focused - Venture Co. – this thing is happening, what can I do about it? Identifying problems and opportunities Reduces market risk (someone needs solution) Demand side

Product Focused - Existing Co. – I have this thing …how can I make it better for my

customers Supply side


86

Sales & Marketing

Sales (Revenue): Money received for selling product or service Source of funds for business operations Basis for business existence

Marketing: how company gets sales selection, pricing, promotion and distribution of products/services to

customers

COMPANY Customers

Product/Service

Money


87

Marketing and 4 C’s & 2 S’s


Competitors

Substitutes

Channel Customers

Collaborators協力者 / 協業者 “5th C”


88

Customers

Who are your customers (or target customers)? How many potential customers are there? What are their characteristics?

Age, sex, wealth, education, hobbies, work, is it one person? What are their goals, desires, needs, wants?

How do they buy? What do they think about? Where do they get information? Who influences them? What is important to decide (price, features) When do they buy (seasonal products, bonus season) When do they pay?

Market segment = group of similar customers Broad market = U.S. Market, Software Market Narrow market segment = left-handed golfers


89

Example Consumer Market Segmentation & Positioning

Older Drivers

Older Families

Younger Families

Single Men

Single Women

Jaguar

MazdaVolvo

FordToyota

O

O

O

O

O

O

O

O

O

O

O

O

O

O O O

O

O

Wealthy, Single, Women

Wealthy, Single, Men

CarAmericanSafeZoomClassyTakako Tanaka

JaguarIn Pink

Automobiles


90

Women, buy ALL the stuff

Women buy or influence the purchase of nearly all consumer products

and an increasingly high percentage of business related products

1

1 Tom Peters, author of In Search of Excellence


91

Business Market Segmentation

All U.S. Businesses

1-person companies

Small Businesses>1 person

Medium Businesses

Fortune500

Microsoft

Large Businesses

10 million total

1

500

9 million

How Many

~ 10-20,000


92

Consumer & Business Markets

ConsumerMarket

Business/IndustrialMarket

Product

Service

Haagen-Dazs

Amazon

Uniqlo

Starbucks

eBay

SonyGE

DellIntel

Askul

HP

Bloomberg

Microsoft

ヤマト

Nike

Google?

Secom

Hair Salon


93

3rd Party Business Model

COMPANY Customers

Product/Service

Money

COMPANY User

Product/Service

Money

Sponsor

OtherService


94

Sales/Buying Cycle

Awareness => Interest => Trial => Purchase => Repurchase

Hear About Curious Try Buy Use Again

This Exists Educate Test Use it Keep Buying

Repeat customers are key to business success


95

Industry/Market Life-Cycle

Emerging Growing Maturing Declining

SALES

TIME

Awareness Interest Trial Purchase Repurchase


96

Technology Adoption Life Cycle

Innovators EarlyAdopters

EarlyMajority

LateMajority

Laggards

Geoffrey Moore, Crossing the Chasm

Time

Examples- Internet

AcademicsTech. Fans

FinancialServices

Main Market


97

4Ps – “Marketing Mix”

Product (what do we make) Place (where do we sell it) Price (how much we sell it for) Promotion (how do we communicate about

it)


98

Product

What is our product and/or service Physical/tangible – alarm, software, newspaper, coffee Intangible – security, insurance, information, experience

Why do people buy it What does it do? How is it used?

Does it need something else? One-time or consumable?

Packaging (box, label, information, customer experience) Positioning

How different is it (perceived) from other products? What is my brand image/strength


99

Favorite Products

Product Company Target Customer

Packaging Channel

Competitive Products Substitutes

Value Price Cost


100

Place – Where do I sell?

Choosing the Channel, Supporting It How many potential customers are there? Can I easily identify customer? How expensive is my product? How many products can I sell one customer? How powerful, or valuable are the resellers? Are there many resellers that compete?


101

Favorite Products

Product Company Target Customer

Packaging Channel

Competitive Products Substitutes

Value Price Cost


102

Price Issues

What does it cost to produce? (floor) Cars, Soda, Computers Pharmaceuticals, Software

How much value does it have to customer? (ceiling) How many can I sell at each price?

How many customers are there? How much competition is there? Is it easy to compare with other prices? How much better is my product?

Does price fit with my positioning?


103

Price & Margin

Cost

Price to Channel

Price to customer


104

Product Positioning Promotion


105

Promotion (communications, “selling”)

Advertising Push (direct mail, email)

Is each customer readily identifiable? Pull (TV, radio, poster, newspaper, some banner ad)

Can’t readily identify individual customers Internet can be push or pull Chirashi?

Public Relations Investor Relations Intel Case Examples

Motorola: 13 Wall Street Journal Ads Intel: 6% rebate = 4% up to 66% of Print, 2% up to 50% of TV/radio


106

Promotion & Market Segmentation

Men

Overweight Men

Overweight Athletic Men

Overweight, Athletic, Beer-Drinking Men

Overweight, Athletic, Beer-Drinking Men,

Who care about their figure

Taro Tanaka

Night TV

Direct Mail

FootballBroadcast

FitnessMagazine

Train Poster

Promotion Media

People TV

Targeted Poster


107

Advertisement Discussion

Product/Service Target Market Medium Value Proposition “Message” Buying Cycle


108

Next Class ６月 1 日 Dell Online Case Study

Region Goods/Service Marketing Project

www.venturesmith.us


109

Dell Case Issues to Think About

Company History and Choices Industry & Competition Products Customer/Market Segments Pricing Channel/Operations Competitive Advantage Case questions & decisions


110

Region Marketing Project Group project 2-3 people Pick product/service from Kagoshima or home region Pick a target market Develop company sales/marketing promotion ６月 1 日 presentation (powerpoint, poster, or other)

Presentation: 5 分 Q&A and advice: 2-5 分 English Preferred


111

Region Goods/Service Promotion Project

Product/service: Company/brand: Customer target & size: Promotion message: Place: Channel: Competition: Price: Collaborators:

+ ADVERTISEMENTSample


112

Promotion Project

Product/service: Company/brand: Customer target/size: Business Model: Promotion message: Place: Channel: Competition: Price: Collaborators:

Kagoshima fresh tonkatsu Big Pig Ka-ton Japanese tourist hotels (200?) Buy, resell tonkatsu to Customer Japan’s juiciest tonkatsu Trade fair, magazine, site visits Direct Kumamoto Ton, Nissin Slight premium Kagoshima pig farmers 会


113

So Fresh You Think It Can Fly

TM


114

Fit – Is this the Right Match?

Opportunity Environment (4Cs) Marketing Mix (4Ps) Selling/Buying Cycle (Goal) Promotion Message & Strategy Business Model


115

Suggested Readings

Books 競争の戦略 by マイケル・ E. ポーター日本の競争戦略 by マイケル・ E. ポーター , 竹内弘高キャズム by ジェフリー・ムーアフォーカス―市場支配の絶対条件アル by リースパーミションマーケティング―ブランドからパーミションへ by セスゴーディ

ンネットビジネス戦略入門 by パトリシアシーボルト

Video ペイ・フォワード with ケビン・スペイシービッグ・チャンス with ケビン・スペイシー Glengarry Glen Ross with ケビン・スペイシー

WWW Entrepreneur.com


116

Class 5:

Dell Online Case Study


117

Table of Contents – Outlines Story [Executive Summary] (should be listed)

Business Opportunity1.1 Internet is Huge and Spans the Globe1.2 Exponential Growth Will Continue for Foreseeable Future1.3 International Commercial Use is Fastest Growing Segment1.4 Unmet Needs of Target Market1.5 Pacific Internet Nodes are Key Players1.6 Technology is Proven

Business Strategy2.1 Goals & Objectives (generic title vs. become dominant

provider)2.2 Buy Existing Nodes2.3 Deliver Value-Added Products & Services2.4 Focus on Sales & Marketing2.5 Consolidate Operations 2.6 Position Against Major Competitors

Organizational Plan (all generic titles)3.1 Plan of Organization3.2 Founders and Management Team3.3 Implementation of Organizational Plan3.4 Company Values

Financial Outlook4.1 Financial Summary4.2 Revenue Forecast4.3 Income Statement4.4 Cost Structure4.5 Source and Use of Funds4.6 Balance Sheet4.7 Capitalization and Dilution

Risk Management


118

Suggested Reading

Books & Magazines Movies

Wall StreetStart-up.com

WWWsec.gov (EDGAR, 10K filings, S-1) licensing.org Licensing industry association


119

Course Overview Introduction to Venture Business 　　 Venture Business Concepts Related to

Industry Analysis, Business Models & Strategy Sales & Marketing Finance, Accounting, Control Strategy, Planning, Management Operations Product Development/R&D HR (Human Resources) PR IR (Public Relations, Investor Relations) Business Communication

Case Studies Projects & Presentations

Marketing promotion presentation (group) New product or service idea (group) New business idea “pitch” (individual) New business plan and presentation (group)


120

Today’s First Drucker:

Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity.

-- Peter Drucker

利益は、企業行動とビジネス決定の説明、原因または、理論的根拠ではなく、むしろ、それらの妥当性のテストである。


121

Entrepreneur’s Approach

Anticipation （予想）– look ahead Timing – move quickly, be ready, catch window Adaptation 　（適応）– reacts, adjusts quickly to

change Synthesis （総合する）– puts the pieces together Momentum （運動量）– keep moving forward

Trust – expect high team loyalty Faith & Confidence – future path is unpredictable Luck – who knows what can happen today?


122

Entrepreneurs vs. Administrators What/where is the

opportunity? How do I do

something about it? What do I need? How can I get needed

things?

What opportunity fits us?

How do we fit in the market?

What things do I control?

How can I reduce risk?

Documents

Class 1 PPT: Venture Business Overview - Industries, Business